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tv   Capitol Hill Hearings  CSPAN  April 19, 2012 1:00am-6:00am EDT

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waiting patiently for the sun to set and when it is time to leave i would shout it from that mountainside ♪ >> we ask students >> today we go to new jersey to talk with the second prize winner. hi, zach. how are you? >> i am well. >> why did you choose that topic to focus on? >> i have been brainstorming all the different freedoms. these are the questions i asked people on the street in my video. all the freedoms were not part of the original constitution. there were amendments to the constitution.
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that made me hackneyed, because maybe a lot of other people would be doing that. the amendments to the constitution or not as important as article v itself. that is part of the original constitution. >> what did you learn from the random interviews? >> i realize that everybody has an esoteric view on the constitution. it is a cursory understanding. they don't really get the full picture of what the constitution is. it impacts the people of the united states. >> you interviewed some experts on the topic. >> i interviewed the lawyers, i
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got a political perspective. i interviewed historians and i got more than just why we do this or how we do this. how they did this originally. it was the original intention. the constitution is a wonderfully crafted document that was extremely well thought out. >> tell us your favorite part in creating this documentary. >> when i was in the editing process and all my interviews -- i was not sure how it would come together. after going over the statements and the different talking points, i realized this could be put into something excellent and something interesting.
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when you see each individual interviewer, each statement after a question, it doesn't seem like it could be put into something so cohesive. once it got put together, it is something awesome. >> we do what others -- what would you like others to learn from your documentary? >> that the constitution is something more than just the freedom of speech, the freedom of religion. how that legislation process works and how everything in the constitution is extremely well thought out. >> thank you for taking time to talk with us. here's a brief portion of the documentary. >> what is article v? do you know what article v of
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the constitution is? >> no. >> no. >> no. >> the congress shall propose amendments to the constitution and then should the joint resolution passed with 2/3 votes in both houses, then it goes to the states where the 38 states, 3/4 of the states will have to ratify it before it becomes the law of the land. a provision allows the states in the face of inaction to ask for a constitutional convention to be established for that purpose. >> what makes article v so important? >> you can continue the conversation on facebook and twitter. >> when i was embedded
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in eastern afghanistan, the soldiers kept telling me that the u.s. government was wasting tens of billions of dollars. >> douglas wissing follows the money in afghanistan and funds corruption -- finds correction from the top to bottom. >>, howard, not long after president obama took office, and the state department was out there saying it is counterinsurgency. we are going to do this, when hearts and minds, nation building. colonel howard said don't send me any more money. senate contract officers that and oversee this stuff. i need people. i did not need more money. >> bankrolling the enemy, sunday night at 8 eastern on c-span
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q&a. >> two things, one is, this is such a complicated conflict that we have never fought a war like this before. the second thing is that what is referred to back here in washington as nation-building is really very targeted war fighting. >> this week david woods won a pulitzer prize for his syrinx -- series for the huffington post. you can watch online at the c- span video library. find over a quarter century of american politics and public affairs on your computer. >> several live events to tell you about tomorrow morning. house majority leader eric cantor will be interviewed by
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political's mike allen. at 10:00 a.m. on c-span3, defense secretary leon panetta and the chairman of the joint chiefs of staff's testified to that arms services committee about developments in syria. >> from the colonial era, prohibition, to today, drinking for better or worse has always been part of the american landscape. "saturday night live" on american history tv, a history of all of america. watch your simulcast. at 8:00 easternlive on c-span3. >> members of the senate budget committee met wednesday to discuss the budget proposed by the chairman, senator kent conrad. that is coming up about 15 minutes. before that we will speak with a
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reporter covering the issue and hear from committee members before at the meeting. >> joining us is erik wasson. what caused him to change his plan? >> kent conrad had saw to become consensus of all his democratic members on the democratic plan but was unable to do so. he decided to put forward the bowles-simpson version he is going with. it is important for viewers to know that there will not be any vote today on this plan. there could be boats after the election -- votes after the election. >> the senate has said that they have not produced a budget in three years. does this give them added
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ammunition? >> i think it does. the house budget chairman normally does not resort to more personal attacks on conrad. i think republicans are really jumping on this, where as conrad says because of the partisan nature of the debate right now before the election, he has got the conversation going to possibly lead to negotiations after the election. >> senator conrad has been a proponent of bowles-simpson since they made a recommendation in 2010. what did you like about it? >> mostly that it attracted bipartisan support when it was presented in december 2010. you had senator tom coburn in my crapo for it.
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-- and mike crapo for it. conrad like the fact that it is balanced for post -- this a budget agreement? >> they were put aside temporarily. they will be facing massive events. the bush era tax cuts will expire. it is a sequestered of spending that will begin january 22. there are events that of a plea congress does not do this. triggerhopeful it will legislation. it used to be so massive that there was the drafting of bills.
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you like to get that done. >> thank you. in.let's get our team en this afternoon we had hoped and expected that we would be marking up on the budget introduced by chairman conrad. he had been on the simpson- bowles commission and the gang of six and we were interested in
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seeing how he would let out a plan. it is clear in recent hours he came under great pressure from the democratic leadership who did not want their members to have to vote for any budget. this is a continuation of a sustained plan to do that, to avoid this. last year there was not a budget produced by the leadership. when they were forced to deploy, at they were voting against president obama's budget.
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they voted against all the budgets. it is favoring a single thing america. i hope we would be able to go forward today with a plan that would offer us an opportunity to participate in the required process. i intended to bring up president obama's budget. senator toomey is prepared to advocate for his historic budget. i think senator conrad deserves credit for wanting to do this. they believe this is a response ability in law and morality.
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the majority party should lay out its plan for the future. they explain it to the american people. if they're not willing to do this, they're not doing the things necessary to lead our country in the decades to come. that is where we are. i have a great deal of respect for senator conrad. he has been very open with me. i am convinced he intended fully to come forward and have a real mark up today. i know he is disappointed. i am deeply disappointed. >> this marks 1085 days without a budget. i agree with what he said. i think he wanted to do a budget. he feels conscientious about the responsibility he has.
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what is really unfortunate is that his leadership lower the boom. what this has become now really is a dog and pony show without the dog and pony. we're going to the other case a raid where we all have -- there is a charade where we all have this. the american people are going to go another year about putting a plan that describes in detail we're going to deal with the big challenges facing this country. we are on a fiscal cliff. nobody wants to make hard decisions. the democrats in charge of the committee and senate have no interest whatsoever in dealing with these issues are moving forward with the budget. it is a disaster for the country. it is unfortunate for this
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institution that has the opportunity to be good stewards of the tax dollars. what we're saying is an absence of any ideas or thoughts about how to move this country forward. we're going to go through this jury today. -- through this charade today. it looks like we will go without a budget for the foreseeable future. >> let me just add, i do not think anyone really can dispute the notion that the greatest challenge facing the federal government is that we are on a completely unsustainable fiscal path. it is a complete debacle if we do not change the path we are on sync. i'm not sure there's any dispute of that. we have the majority party that is asked to be in control
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refuses to lay out a vision for where they want to take this country. i share the view that i do not think that he acknowledges that the party in control has a response ability to lay out a vision of blueprint of where we go from here. his leadership refuses to ask their members to commit themselves. i think this obligation goes beyond the majority party. i believe a member of the minority has the responsibility to lay out this.
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you probably have copies of this. i will attempt to bring this up in committee today. i may not be allowed to. this is exactly what we ought to be doing. we are amending different visions. this is the customer window for this budget. in the eighth year, it reaches a balance. it is important to put this on a federal path to balance. our friends on the other side do not think of this importance. the advocate levels of spending that will make it impossible. isn't that important enough to have a debate from start to build on these ideas? how are we ever going to reach that consensus if we're not willing to cast those votes to move forward? i am very disappointed that we're not want to have a meaningful discussion, that we're not going to have
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alternatives today. i intend to take my alternative budget to the senate floor. >> i think today will be an unfortunate surveyed. -- charade. his budget last year lost some in the senate. two weeks ago the current budget lost 0-414. the american people need to understand how amazing that is. only are facing a financial crisis the president fails to lead. the democratic senate fails to lead again. i have been involved in the private sector for 33 years. this is the first time i've been involved in an entity that is not have a budget. the united states is the largest
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entity in the world. i want the american people to look at the fact that the democratic party refuses to put their fingers on any kind of a plan. >> this has just been an absolute failure of leadership. it starts at the top with the president of the united states. we know when the spokesman was asked about the set to have a budget, he had no opinion on a pair can you imagine -- opinion on its. can you imagine the president has no opinion on the budget? i ran on the senate to get our fiscal house in order. if we do not address this debt crisis, it is not just about debt.
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mr. president, where is your leadership? you have no opinion of this. your own budget failed. we have a majority leader in the senate by harry reid the coup last year said very clearly that he thought it would be bullish for the budget committee to do its job. this is just absurd. i think the president should be fired for failing to lead on this issue. i think the democrats senate should be fired. if he cannot get the basics of putting a budget together for this country, and then you do not deserve to lead this
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country. this is what it is about. we are about to go into a budget hearing that is a sham. why have a committee do not do the basic budget? >> your predecessors supported some symbols. -- supporting simpson-bowles. there is the concept. how would you come out if you are a lot to vote? >> what we are voting on is not thought simpson bowls. the circumstances are different. i'm willing to sit down with anyone when it comes down with a minimum of $4 trillion in debt reduction. i think we need to do more. the house came up with a blueprint that does do more for this country. i'm willing to sit with anyone on the other side of the aisle. this is a joke. i do not think this is the right
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way to do things. >> the democrats controlled the committee. they can pass a budget. it is oftentimes misrepresented that republicans can block a vote. we cannot. they should get their act together. they should fill their responsibility. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012]
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>> i want to welcome everyone to the senate budget committee today. we meet to begin consideration on the budget for 2013.
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all of those cuts are not in law. a lot is much stronger than a resolution. as all of us know here, a budget resolution is purely a congressional document. it never goes to the president
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for his signature. a lot like the budget control act was passed not only in the house and senate but was signed by the president. so it is the law. what we do not have, and the reason i think it is important that we find a way to negotiate a long-term budget agreements is we do not have a long-term budget plan. that is what we must now work to achieve. the fiscal commission budget plan which i am presenting today provides a comprehensive and balanced deficit reduction framework to build upon. it is not perfect. but it does represent a middle ground. it brings the deficit down from what it would otherwise be and it brings the debt down from what it would otherwise be. it does so in a responsible, fair, and balanced way.
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it protect the most vulnerable. include savings from across the budget including from entitlement reform and from tax reform that raises revenue while lowering rates. i recognize adjustments will have to be made. what i am putting before the body is the original bowles- simpson plan. obviously things have happened over these two years. for example, the budget control act. we no adjustments will have to be made. that is going to take time. those adjustments will have to be negotiated. those negotiations i think are critically important to take place before we get to the end of this year when we will face the expiration of all the bush tax cuts and the imposition of the sequestered. i intend to give members of the
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committee and extended time to evaluate my mark. as they review this plan, i hope to hear back from members on how they think we can maximize our chances of successfully reaching a bipartisan agreement. there's nothing i want more than to reach an agreement on a long- term plan right now. it could be that outside events such as a crisis overseas will drive us to come together. i would be open to reaching conclusions sooner. i recognize the chances of that were slim. many will not be able to reach a conclusion until after the election. it may be that all sides to be difficult to move off their fixed position before a national election. we are going to have powerful motivating factors pushing us
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to ward resolutions. there's the potential imposition of the sequestered. this was structured to have a boat's after the 2010 election. it was structured that way for a reason. it was critically important to have the votes when there is t greatest prospect of actually getting a results. it we believed the best chance was right after an election. this is what i am hoping to replicate now. by presenting the plan as a budget resolution, i hoped we could be read the with a
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bipartisan plan later this year. it will take a lot of work. all those who served in the group of eight know that this cannot be done in a matter of weeks. the ground has to be plowed it now appears we are borrowing, as 4 cents of every dollar we spent. that is the hard reality that we confront. that is not sustainable. this is expected to reach 104% of our gross domestic product this year and continue rising to 119% and g.d.p. by 2020 to. most regard this above '90s term as the threshold. -- 90% as the danger threshold.
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reface both a spending and revenue problem. spending is near its highest level share in more than 60 years. both sides of the ledger are part of the problem and will have to be part of the solution. we know the american people support a balanced approach to deficit reduction. a poll conducted, people were asked what is the best ways to reduce the federal budget deficit? 17% support to cut the major programs only. 8% supported taxes only. 62% so we should do it combination. the fiscal budget plan does just that.
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it cut spending and raises revenue through tax reform. it does exactly what the american people are asking us to do. it is the kind of plan i believe the american people will support. the guiding values of the plan as they were outline were as follows. we all have a patriotic duty to make america better off tomorrow that it is today. we should not disrupt the fragile economic recovery. we should cut and invest to cut economic growth. we should protect the truly disadvantaged. we should cut spending we cannot afford. we should demand productivity and effectiveness from washington. we should reform and simplify the tax code. we should not make promises we cannot keep.
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the problem is real and the solution will be painful. we should keep america sound over the long run. here's a brief overview of the fiscal budget plan that i am putting before the body today. it includes $5.40 trillion of deficit reduction over 10-years including savings from last year's budget control act. a large the deficit from 7.6% of gdp in 2012 to 2.5% in 2015 and 1.4% in 2022. it takes the deficit below the three% of gdp level that is widely viewed as sustainable. it lowers the debt to 93% of gdp by 2020 to, putting that on the clearly downward trajectory. -- by 2022.
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it reduces overall spending to 21.9% of gdp by 2022 and reduces discretionary spending to a historic low. it builds on health care reform but at additional savings. it fully offset the fix preventing a dramatic drop in medicare payments to physicians that treat medicare patients. it calls for social security reform that insurers this and calls for social security savings to be used only to extend the solvency. it includes fundamental tax reform that will make the tax code somewhere, there, and more efficient law raising additional revenue. this brings the deficit down to 1.4% of gdp by the end of the
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decade. it stabilizes the debt by 2015 and begins to bring it down steadily after that. speding averages 21.8% a g.d.p., which is actually below the level that we experienced in the reagan administration. the plan brings discretionary spending down from 8.4% of gdp to a historic low of 4.8% by 2020 to. -- 2022. health care spending is the guerrilla. -- 800 pound gorilla. rising health costs remain the single largest factor of the nation's long-term fiscal imbalance.
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in 1972, medicare and medicaid totaled only 1.1% of gdp. by 200050, that federal health spending could grow to more than 13% @ g.d.p.. we can see that medicare represent the fastest-growing portion. it is important to remember that rising health-care costs are a problem in the private sector as well. this is not just a medicare or medicaid related problem. the plan i am presenting today does not reopen the health care reform debate. it builds on health care reform by providing additional health care savings. it provides an option to phase out exclusion for health care.
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they said this would be one of the most of what the insteps we can take to bend the cost curve on health care spending. it fully assets this. it includes savings proposals including cost sharing, reforming payments to health- care providers, eliminating state gaming of the medicaid tax, and extending the rebate to dual eligible to in medicare. all the budget plan calls for the same social security reforms as the original fiscal commission plan, it does not include in its numbers the savings from those social security proposals. that is because the congressional budget act of 1974 that established the budget process prohibits the inclusion of social security and the deficit totals of a budget resolution. social security reforms will
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have to be considered separately. the fiscal commission budget plan does include a policy statement that supports the original fiscal commission recommendations regarding social security. it calls for social security reform the reforms social security to make it solvent, not for deficit reduction. all the savings from social security go to extending the solvency of social security, none for deficit reduction. it restores the 75 years solvency and strengthens the safety net would enhance a minimum benefit for low wage workers. a hardship exemption for those and able to work past 62. all of these were part of the original bowles-simpson proposal. i carry them through to this proposal. a gradually increases the
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maximum level of wages taxed for social security raises the entire engage. -- the retirement age. with respect to the enhancement but that provision, i received a commitment that it would be better targeted to affect low income of this series. this also includes the fundamental tax reform. the state of our tax code is simply indefensible. it is hurting the competitive position of our country. expiring provisions create
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uncertainty, the tax code is hemorrhaging revenue. we also need to restore fairness to the tax code. the current system is contributing to the growing income inequality in the country. when a tax reform to help address the long-term fiscal and balance. revenue is part of the problem and must be part of the solution. adopting tax reform will spur growth and allow us to compete better in the global marketplace. his here is how our cbo director the economic benefit of tax reform before this committee. of a " i think analysts would agree that reform of the tax code that broadened the base and brought down raised would be positive for economic development, economic growth in the short term and over the
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longer time." we have seen the gap grow in recent years. the real after-tax household income for the top ones firm has grown about 275%. the income for the middle has grown about 35%. our tax system is contributing to this income inequality. it is not the only factor. there are other factors. i think we have to acknowledge the tax system is part of it. tax expenditures that have been added over the years are disproportionately benefiting those who are at the very top.
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in comparison, the middle quintile received about $3,200. by scaling back some tax expenditures, and they are now more than all of the appropriated accounts, we can simplify the code to vastly improved economies and effectiveness and help restore fairness. here is how martin feldstein describes the benefit of reducing tax expenditures. "cutting tax expenditures is the best way to reduce government spending." let me repeat. "cutting tax expenditures is the best way to reduce government spending." it does not increase marginal
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tax rates or reduce the reward for a savings and investment are risk-taking. it also removed incentives that distort private spending decisions. cutting tax expenditures is not at all like other ways of raising revenue. we also know we need more revenue. some have argued that revenue should not exceed 18% of gdp. on the five occasions when the budget was in surplus, revenues have ranged between 19.5% a g.d.p. and 20.6%. we will likely need a somewhat higher revenue level in the future because the country
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faces an unprecedented demographic situation. this includes the tax reform i believe needs to be adopted. the lowest tax rates. it improves america's global competitiveness. in makes the tax bill more progressive. the report included an illustrative tax reform plan that demonstrates how scaling back tax expenditures can simplify the code while lowering rates. instead of six brackets, it includes just three. it also be reduced, the corporate rate. capital gains and dividends would be taxed as ordinary income. that is part of the original bowls simpson -- bowles-simpson plan.
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it could be maintained if it were caught up with a higher top rate. the child tax credit would be preserved to help working families. the alternative minimum tax would be repealed. the fiscal commission budget plan would increase revenue to 20.5% of gdp by 2020 to. over the 10 years, i am almost done, i appreciate your patience. i know this is a link the
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presentation. there's a lot here. over the 10 years, revenueçó wod average 19.7%, roughly the same as the clinton administration when we experience of the longest time economic growth in the nation's history. 24 million jobs were created. compared to a current law base line it represents a $1.80 trillion tax cut. compared to current policy, it represents an increase revenue of $2.40 trillion. compared to current law, it represents a tax cut of $1.80 trillion. like the original fiscal proposal, it also includes a number of process changes to improve budget disciplines. this includes discretionary spending caps been forced by sequester. firewalls third 2015. a separate cap for war funding.
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let me say with respect to a more rigorous procedure, senator crepo has done a good job ofçó cutting down the emergency loophole. all of them were in bowles- simpson. it feels self to pressure congress to maintain a stable debt to gdp ratio in 2015. more accurate inflation adjustment and a process to ensure more extended unemployment benefits. that is the plan. it is comprehensive. it is balance. it is fair. it represents the best blueprint we have from which to build a bipartisan agreement.
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i recognized it is not perfect. the recognize adjustments will have to be made before anything like this can hope to be adopted. these adjustments will have to be negotiated. these negotiations will take time. i intend to give members time to evaluate my chairman mark. then i hope to hear back from new on how you think we can best maximize the chance of actually getting the results. how we best maximize the chance of actually getting a result of? we are facing a fiscal train wreck. the expiration of of the bush era tax cut, at the sequester, i do not think anybody thinks this will be a good place to go.
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it is time to move off our fixed positions. i recognize that is probably unlikely before an election. before the ended the year we will have to find a way to come together. this represents a blueprint to begin that conversation. i will now turn to senator sessions for the purpose of his making any statement he wishes to make. there will recognize other members of the committee as we do this in seniority order, alternating between the site to the extent is possible to do. but there are member -- if there are more members on one side on the other, we will go down to everyone has a chance to speak.
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will not be considering movements during today's session. opening statements are in orders. thank you very much for your courtesies the route the hearing season. please proceed with your statement. greg thank you. it has been a pleasure to work with you brought these two years. i know that you understand the challenges facing this country. you have articulated them time and time again carry the problem as we -- time and time again. we have not done it. they just joined the senate this year.
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they have fought to get on the committee. they lobbied and they wanted to be a part of the great debate about the future of america. the first year we had no budget in this committee. i appreciate your being pressured to buy this. i know you intended to have a marked this year. i know there were forces aligned against that. they just did not want to be confronted with challenges inherited in changing the course of america. i do not think that is your belief. i think that is obvious there we are. they'll at should be able to get down to numbers.
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we have had secret discussions and outlines and frameworks. it is laid out in real numbers by congressman ryan. people look at this. i am disappointed that we're not being able to have the kind of market that ought to be basic to the statutory duty of this committee to but fill its responsibility to produce a budget. -- to fulfil its responsibility to produce a budget. i just want to say this. i believe it is important. there's been a systematic plan for many years to avoid a vote on budgets, to avoid being accountable to holding this.
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there might have the democratic committee members stand up and pass a vote for or against his budget. the plane you have offered i do not think is consistent totally with the simpson-bowles plan as i understood it to be. you have no additional cuts in the budget control act. this is a tax budget. president obama stated that he thought that we should have $3 and spending cuts for every one increase. looking at the house version, they had $1 shy in less in tax increases. they did cut spending by about 600 million.
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it is not --that is their version of it. it went down a dramatically.
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we're ready to participate. we are disappointed the majority party has decided to go forward. i will not ease up any more of time. let me say how much i add enjoyed working with the. you do know simpson-bowles laid out some valuable plants that should have been a part of any future budget plan for america. it designed to move after 2010. i have to think the president
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deserves an expression of great disappointment. he definitely decided that he will not lay out a realistic plan for the future and is actually committed to attacking those that have laid out one. this is bringing to bear our own philosophies and approaching to government. >> i think the ranking member for his courtesy throughout this year.
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>> to get this country on track to a better place. their two separate issues being talked about. they're already being confused. . .
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i joined with many of my colleagues. president obama signed it into law. it became the law of the land. senate democrats fully intend to honor our word and stick to that bipartisan level for the next year. i am disappointed that in less than nine months the house republicans turned around and then said to break that. that is clearly not part of what we ship on. we cannot relive a bipartisan does every time somebody makes a noise. i am glad we had decided to focus this committee on
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advancing a real long-term balanced reduction package. and is not going to be easy. we'll have to make some priorities are the long term. that is why i think he put the simpson-bowles in front of us and have the time to really serious look at and began to give this committees and put in began to build on it. i know no individual member agrees with every single part of it.
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there is some i disagree with pretty strongly. it is a very productive and smart starting point for this committee. what we need to get to is a comprehensive deal. one of the most important things about you laying down this is that puts everything on the table. it is thought wall of some
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pieces are declare certain parts off limits. i think this is really the critical essential part of this. every bipartisan group that has ever successfully put together a plan has done so in a balanced way. make sure our entitlement programs defense on this and are secured to the next generation. it put on the table what is in a form part of that. this is what they are paying today in relationship to fairness to many income families. i would say that at the end of the day we have to all remember that numbers on a page are not
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what a budget is about. it is about the real people that are being impacted. this is really about our future. if we're serious about our work here, we will take what you have laid down in front of us and look at it seriously and give us our input, recognizing the end of this year has some pretty big!. we have some tremendous work in front of us. senate ter sessions, i understand your frustration. we can put down a partisan plan here and debate it in have partisan debates are we can do the work that senator conrad has always urged us to do, to sears a look at the future. this surely is a responsibility. >> thank you. >> thank you. thank you for calling a markup
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of the budget for fiscal year 2013. requires congress to adopt a budget by april 15. during this time, more than $4 trillion have been added to the nation's desk. during this time come lead the democratic majority has failed to have a budget blueprint that a lay out their priorities for deficit reduction or a path to balance. they have set proposing a budget is "foolish.
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it is no wonder we're driving toward a fiscal cliff. there's no one in the leadership willing to take hold of the wheel. while i am glad we're meeting to consider a budget revolution -- resolution for forward, i am also puzzled. he has said that we already have a budget in place for this year and next. why are we here? why do need to mark up the budget control act? the answer is clear. president obama clearly agreed when he proposed his budget house republicans agreed when they voted on seven resolutions. this stands alone in their belief that this was a budget resolution. is this because they have no idea on how to balance a budget? i do not know.
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i am also confounded by what i have read in the press that this markup will end today with no consideration of the amendments are out a vote. today is nothing more than speeches with a suggestion that maybe we will meet again sometimes near the end of the year to offer amendments and vote on the resolution. the chairman was "this is a wrong time to vote on the floor. i do not think we will be prepared to vote by the end of the election."
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if now is not the time to eat the solutions and take action, when is that the american people will pay a heavy price for the inability of the senate democratic leadership to lead and offer solutions. i understand the predicament that our beloved chairman is in. i am sorry for the way that this process is being treated and he is being treated by the leadership. he deserves better. he has been a leader in calling for fiscal control for a long time. despite what he knows should be done and want to do, his leadership does not seem to want him to do it.
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the democratic leadership and president obama are content on been absent from the discussion. i anderson the predicament that our beloved chairman is sen. but this process is being treated and he is being treated by the leadership. he deserves better because he has been a leader calling for fiscal control for a long time.
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it put some place 10 years as spending caps to enforce spending levels for two years. that is what it does in the short run. we're not the appropriators. we set the caps. it had a greater force because it was actually signed by the president of united states. so i feel very confident in that. there was, of course, put in place a deficit-reduction process. i appreciate the efforts in doing that. i do want to say that we took that very seriously as head of the agricultural committee. i reached out to the chairman in the house, chairman lucas, and my ranking member and the ranking member of the house and we really did put in a bipartisan plan.
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we really did come up with spending cuts that involve streamlining, consolidating, reforming programs, everything that the public is wanting to do. so one would can be done. we represent about 2% of federal outlays. we propose a deficit-reduction cut. $23 billion. i truly believe that, if we have the will, we can do it because we did it in agriculture. we are proceeding with that deficit reduction. it is a matter of our ability to work together and make that commitment. that is why i know we can actually do this. i don't agree with everything in the simpson-bolles proposal. but it is a thoughtful place to start. it is clear we need to support job creation with real tax reform that simplifies the tax code, closes loopholes, and
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counsels year marks. i also -- and cancels earmarks. i have been involved in that. however, i don't support the efforts that balance the budget on the backs of working families and seniors. frankly, those folks have had enough. they have faced enough. they have sacrificed enough. and that leads me to the difference between the house and the senate. the house budget committee, which i believe proposed and the house passed a budget resolution that represents the absolutely wrong values. limiting medicare and costing over $6,000 more to the average senior, making huge cuts for low-income seniors, the score on nursing homes and medicaid, eliminating women's health care and maternity care -- that is absolutely the wrong approach.
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to mass seniors and middle-class families to pay more so that those of the top can get another tax break is the wrong values for our country. to continued government subsidies for some folks like oil companies were making record profits when we need to be focusing on new emerging technologies is the wrong approach. so as we look at the proposal and how we thought would get to the end of a comprehensive tax reform and comprehensive deficit-reduction plan, we will focus on jobs and opportunities for families. i want to focus on those who have taken a bigger hit on the sea, and sacrifice more than anybody else in this economy. they are the ones that we should be focused on and listening to. finally, i would simply say that you're in a very unique position
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with your experience on these issues and your leadership to really help us come to the long term before the end of the year. we have budget caps in place this year. but we do not have a long-term plan for fiscal sustainability and stability. i look forward to working with you to get that done. >> thank you for those kind remarks. >> when i hear comments about the house budget, i do get a little bit upset. they had the courage to put forward a budget appeared they had the courage to mark it up. they had the courage to vote on it. we have not done that on this side. we keep saying that the budget
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control act is sufficient could if that is so, why did the president put forward a budget. why did he not have the gate -- abrogate his obligation very much in the way that we are abrogating our obligation? i am disappointed when the senate defeated the conrad-greg proposal for the deficit commission. i was pleased when the president went ahead and appointed one. i was again disappointed at his state of the union speech following that. he did not paint the same bleak picture that they had painted. america does not realize the disaster that we are headed for. had he painted that picture and then said, but i will have a budget that will put that forward and put forward in the simpson-bolles budget for us to debate, i soon pass if we had that same bleak picture printed on the people's mind.
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but that did not happen. he came forward with another stimulus budget, just as he did this year. in 1997, when night came to washington, our deficit was -- that number will increase that is even more sustainable. we're spending more today than ever before and we're seeing trillion-dollar year increases in the debt with no end in sight. what will happen if we do not act and cut spending? we will not be able to for the military we need. people will let get their social security checks. roads will not be fixed. all of our money will go to paying the interest on the debt. people should not doubt that this is real. there were riots in the streets increase and their debt was less than ours. i have news for you. our debt per person is more than greece's debt per person. hough time and again, the government spends more money than it takes in. for years, we have tried to hide it, disguises, ignore it appeared we have acted like it is ok to keep spending we don't have been the world today is
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different than the world in 1997. unfortunately, we appear to be hiding once again today rather than making a budget resolution that will be a conference with the majority. while i strongly support the simpson-bolles plan, one of the key aspects was this bipartisan nature. i was not consulted about the plan we are discussing today. ranking member sessions was not consulted. this is not the way legislation is supposed to work. i realize we will be able to work on that even though we're past the deadlines.
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we are supposed to fine the areas where we can agree and push them forward. the simpsons-bolles plan is a good outline. we need to hammer out the details. i imagine some of those details cannot be done because they're not in the budget. the government put in slightly more than two and 3 cents trillion. that is an astonishing amount of spending. we have the opportunity to change that trend. to do that, we have to stop digging. i republican colleagues have introduced cost-saving measures and i have introduced my own bill to balance the nation's budget. while we have done this, where
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is the present and the colleagues in the majority? last year, president obama's budget was such an impossible proposal that it failed. not a single member was willing to support the president's budget proposal. in this senate, we have not passed a budget and more than 1000 days. in the budget we're discussing today is not likely to come to the senate floor for debate until at least after the election. the majority leader does not want his caucus to make politically tough votes. i've understand that. none of us like to make tough votes. but consider this. by avoiding votes, he has been avoiding solutions. problems are not getting salt and the service members more than making the tough votes. at a time when the national debt breaks down more than 49 for every person in wyoming and across the country, there is no justification for business as usual. we cannot wait to be
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politically expedient to do what needs to be done. we cannot keep talking about the problems, talking about solutions, and shying away from substantive votes. our inability to make any changes to the way government operates has left taxpayers with less and less confidence in congress possibility to manage their tax dollars and take responsible action. we cannot continue to punt the tough decisions. right now, the decisions we make will be tough and they will cause some pain. if we continue to avoid making any significant headway in their in -- in addressing our debt and spending, the pain that will be felt in the future will be much greater. i have heard a lot of people in wyoming about the national debt and the lack of resolution. they have shared different ideas and opinions about what solutions we should focus on. but one message is universal --
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do something and do it now. this message should resonate with all of us and galvanize us to come to the table and do what we were sent here to accomplish. instead, it looks like we will end today with more talk and no action. i repeat, the house republicans at least did a budget and voted on it. senator to me has a budget that balances in eight years that he is ready to vote on. yet here we are today without a viable plan from the senate democrats. if it is too bad. unfortunately, it does not look like we have the opportunity to do that work today. i hope we do it in the near future. thank you, mr. chairman. >> senator crapo is recognized. >> i want to say at the outset that i appreciate your bringing forward a proposal, a comprehensive proposal and seeking to put into play a process that will help us to get where we need to get in this country.
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i have appreciated the hundreds and hundreds of hours that you and i and other members of the group the six, now 8, put in to trying to find that bipartisan path to move this country into a stable fiscal position. we face a crisis today that i think is the biggest crisis our nation has ever faced, with the possibility of the threat of some wars. as far as an internal crisis, think this is the greatest crisis america has ever faced. and we've really must have bold and strong action to move forward appeared i have looked forward for a long time to this day, when the budget committee would have a comprehensive plan that we can discuss. i do have to say, as i have said to you privately, that i am discouraged at the same time. although the proposal is being put forward, we will not be able
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to seriously act on it in the committee. i am very discouraged about the fact that we will not move forward. and take the necessary steps that will help us to build that foundation for the ultimate resolution of this issue by congress. i understand that a comprehensive fiscal plan of the nature that we need to put into place is much bigger than actually a budget resolution can achieve and i understand that there are many pieces of this that will need extensive negotiation to be put into place. the reason i am discouraged about the notion that we will not have regular order in this committee is that i believe there are parts of its that the budget resolution can achieve and the processes that the budget resolution can put into place.
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there are many key elements that need to be worked into it. for example, i think some things need to be taken out of the plan. some things need to be added into the plan. and i will give a couple of specifics about that in a minute. but the point is we could make significant progress if we could simply have the opportunity in this committee to get into regular order and let all of these ideas be hashed out and played out. when we talk about what is needed in terms of a comprehensive solution, you indicated that the proposal you're putting down today is in excess of $5 trillion of posture reduction. we need at least that if not more. as i have looked at the bolles- some some proposal, there is five other elements that need to be included. first, the discretionary spending controls. second is a major reform of our entitlement systems. third is reform and achieving the solvency of social security
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system. fourth is an enforcement mechanism, which you referenced earlier, that is strong enough to make sure that the budget control act or whatever budget this congress adopts are ultimately follow through on. i have served in congress for a number of years now and i cannot recall ever getting to the second year of any budget because we always get into the first year and, by the time we get around to the next year, we passed a new budget or we never pass a budget at all. even in the first year, we wait significant parts of the budget that we have just adopted through the emergency designation procedure and other procedures. that is why it is so critical that the fourth element of this be a powerful enforcement mechanism, which we negotiated. and the fifth is the tax reform. as you said earlier, we have a
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tax reform -- a tax system right now that is unfair. it is expensive to comply with. it would be hard for us to design a tax system that is more unfair or more expensive to comply with, more complex, and frankly more competitive to u.s. interests than the one we have. those five elements are the ones that we need to achieve. the reason i go through that is because, if we have a chance to do a marked up, we would be to get into the details on some of this parent we would not -- some of this. we would not be able to do all of it. but let me just give a couple of examples. the enforcement mechanism that i just talked about -- i would like to bring an amendment and i would like to see this committee adopt the enforcement mechanism that the gang of six negotiated could i think it works. i think that amendment would pass this committee if we could have the chance to do so. by doing that, we would be
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putting into place or at least be putting into play some of the key solutions for a broader package. another would be in the tax arena. as was told to us in both the fiscal commission and in the gang of six deliberations and others, one of the best things we could do for generating more revenue for our economies to get a tax system that is more competitive and that meets all of the tests that we both discussed here today. that would generate phenomenal economic growth and that is the kind of thing that would generate additional tax revenues and help us meet the revenue targets in the proposal. i would like to bring an amendment to change your scoring mechanisms here in congress so that we recognize the dynamic impacts of tax policy and spending policy and utilize that in building the bipartisan agreement to solutions to move forward. i think we could have progress
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there. in the agricultural arena, they got the message. and they have looked at the targets, republicans and democrats, and they made great progress in coming together in agreement, bipartisan agreement, to meet those targets, even though we have not yet enforced them. there are numerous other examples. my point is this. i am happy to see is now finally getting an opportunity in a structural way in congress to start deliberating about these issues while we will also need to continue the negotiations outside of the hearing room and outside of the committee room. but i am discouraged that that process will only last short time and that we will not be in here putting into effect regular order in such a way that we could actually construct and adopt and put into place and a lot of the pieces of what will ultimately be needed.
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i will conclude with this. you mentioned what will happen at the end of the year. as i look at it, we have the expiration of the 2001 and 2003 tax cuts. we have the sequestration coming into effect. we have the expression of the payroll tax holiday. we have the expiration of the employment tax extension -- unemployment support extension. we will reach the debt ceiling. many of the other, if we do not resolve them yet, many of the other text extenders and other tax policies that we badly need in order to help make our current code more competitive will be expiring and in need to be handled. the list goes on. and the dock fix and many others will come into play. i am for getting some others. so my point is, if we can use regular order between now and hopefully the next couple of weeks to build some of the pieces and put them into play, that this committee can do, we will give ourselves a much better opportunity when the november-december timeframe arrives to be able to put together the kind of fiscal policy plan that our country needs.
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so i just ask you again, mr. chairman, to reconsider the notion that we will let go into regular order, get the budget considerations in front of us, find those parts that we have to delete in order to reduce bipartisan agreement, find those parts of it can add to it that will help build and put into place the pieces of the solution that can help us later in the year and adopt a budget. i implore you, mr. chairman, to consider letting this committee do that job. >> i think you for the extraordinary efforts, both as part of the simpson-bolles commission and as part of the group of six, now the group of eight.
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you literally have spent hundreds of hours in a very serious way. and i have enjoyed working with the senator. senator card and is recognized. >> let me respond very quickly to the senator crapo. as i and stand it, what i would consider to be the regular order, if we can have a budget resolution that allows our committees to function, we have an agreement, such as the bolles-simpson agreement that all of you have worked on, that would be the most constructive way to get into the details of the jurisdictions will have to get into any way. and if you're giving adequate instruction, we can get to that point without the divisiveness that the budget markup usually entails.
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i like to make a couple of comments if i might. our current deficit is not sustainable. we all understand that. we take a look at the amount of debt that we are accumulating and the percentage of our economy is not sustainable. we know we need to do something about it. it will lead to higher interest rates and it will be very damaging to our economy. we have the responsibility to produce a credible bipartisan plan for long-term issues. i oppose many of the policies that led to these deficits. but i have a responsibility along with every member of the senate, to come up with a credible plan that will get us out of these deficits. short-term, as the chairman pointed out, we have the budget control act.
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it is stronger than a budget resolution in that it has an enforcement cap and has been signed by the president. but, if after 2013, we need more, we have the bolles-simpson model to move forward. you do not have to look at the democratic sources are the republican sources. it has been validated. it has been a credible bipartisan plan to move our country forward in a long term responsible budget plan and is bipartisan. it protects our most of vulnerable citizens. i commend them for the protections for the most vulnerable. that is very well pointed out in the commission's recommendations bid it is balance between revenues and spending cuts. quite frankly, there are only two ways you can balance the budget.
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you bring in more revenue or you cut spending. and the bolles-simpson has a proper balance between additional revenues and reduced spending. i applaud their efforts on it. if you look at what this committee should be doing, which is giving the macro instructions to our committee, i would hope we would reach that consensus. when the bolles-since and recommendation came out, i took exception to some of the recommendations, as each one of us has been but that is the work that will be done by the committees of jurisdiction that is not the work to be done by the budget committee. not disagree with some of the tax recommendations. i listened to senator crapo. he had a lot of really good ideas. but that would be a to the senate finance committee that we serve on to reconcile that with the dollar amount that we need to bring in good that is how it should work the chairman's mark up allows us to do that. i strongly disagree with
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specific recommendations as it relates to federal workers. i felt the way that they handle federal compensation and workforce numbers would do a disservice. and to come in with the numbers without the punitive action divisive to our federal work force. i believe the chairman's mark allows us to do that. it is our responsibility to act. i hope that we will act this year. it will only happen if we have a bipartisan agreement to enact. we have to listen to each other. if we can do that, we can avoid sequestration. we can remove the uncertainty that is currently in our economy, which is a drag on our economic recovery. it could help our economic recovery. a partisan budget, either presented by the democrats are the republicans, will not begin this process. if we were to have our democratic budget against a republican budget, it will not work.
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you saw what happened in the house of representatives. it will not pass the senate and it is not advancing the process of moving forward with a game plan for fiscal year 2014 and beyond. so i really wanted to applaud the chairman for his actions. it is the right way we need to move forward. i will be the first to acknowledge that it is a long shot that we can get this done before the elections. but if we don't move in the chairman's direction, we have no shot. this least gives us a chance that most people think we cannot get done. and i think the chairman has given us the best possible ability to accomplish those results and i applaud him for his work.
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>> i think the senator. i would now recognize senator corpsman for his comments. >> thank you, mr. chairman. we will miss your charts when you are no longer chairman of the committee. we will not miss the bad jokes. [laughter] and the friendly banter. but i would say how much i appreciate your efforts to bring a budget to the senate floor and how much i sympathize with your dilemma. even though, as one of the acknowledged budget experts on capitol hill, there are not many of them, i am talking about you, not me -- you understand our country faces a looming fiscal crisis. yet majority leader reid, who determines what measures will or will not be brought to the floor of the senate, has shown no interest in having the senate complete one of its most
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fundamental duties. which puts you, as chairman of the budget committee, and in an awkward position. that is both unfortunate and unfair. at the end of a long and distinguished career, you deserve much better and so do the american people. as members of the committee know, it has been more than 1000 days since the senate passed a budget plan. and if you don't -- if you cannot pass a budget, if you do not vote, as far as i can see, there are no plans forced to vote on a budget this year, either here on the committee or on the senate floor. and many working families small business owner can tell you that, without a budget, it is much harder to address current or future financial problems. the situation in congress, as we see it, as i have tried to describe it, leaves my constituents scratching their heads with amazement.
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that usually morphs into outrage when they got their television sets when they cannot see why congress cannot get their act together and perform one of its most basic responsibilities. washington will not get its fiscal house in order without a budget plan could this has led to a trillion dollar deficits, runaway deficits now larger than our economy and with the united states government losing its aaa credit rating. for this reason, i am disappointed that this committee will not proceed with the market process that will allow members to offer amendments. as a member of the senate arms services committee, the finance committee and judiciary to marry -- judiciary committee, i understand it is necessary to have those amendments. again, you cannot get a budget you don't vote. it appears that everyone accept the present and the majority leader think it is a worthwhile process to put forward a realistic budget. the house of representatives has had seven votes on different budget proposals.
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both senator toomey and senator paul have introduced their own budget proposals. we also have a president who follow the law and submitted a budget. but i would note that it did not receive a single vote in the senate last year nor did the president's budget receive a single vote from a democrat or republican in the house of representatives this year. i think we have an idea when a member of the house supported the president's office. it increases spending every year in the budget window. we know the president's budget would add $10 trillion to the debt. this further weaken their fiscal house and now, of course, every man, woman and child owes $50,000 in national debt. we also know that the president wants to raise taxes on the
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american people. of course, his budget includes two dollars trillion in higher taxes. finally, we know the president's budget does not make a serious attempt to strengthen programs like medicare and social security, which we all know are unsustainable. in other words, the president proposes a big tax increase before dealing with the spiraling costs of entitlement programs chased with higher taxes. this is not a prescription that will either put americans back to work or get our fiscal house in order. i sincerely hope that the majority leader will decide to shelf the political theater that will do nothing to create jobs or lower prices at the pump or solve america's debt crisis. we need leadership. we don't need any more gimmicks. and delays. the american people have waited long enough. otherwise, i am afraid that the public cynicism that is now generated about a 10% approval rating for congress will only continue to grow in the days and months ahead. this will not bode well for anyone, democrats, republicans, or independents. i know we can deal responsibly with the great challenges that
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face our country on a bipartisan basis. but it will take leadership. i appreciate the leadership you have shown, mr. chairman, in raising these issues. but i am disappointed that we will not be able to actually vote on a budget and that this is more of an educational process than it is actually meeting our statutory duties to take up and consider a budget. but i realize that your restricted by the majority leader's refusal to bring the budget to the floor. he is the traffic cop. he decides what will go and what will not be considered. he has made it clear that he will not allow a budget
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resolution to come to the floor of the senate because of the imminent elections in november 2012. not wanting to put any of its members to making tough votes. but that is what we're here for, to make tough decisions on serious problems and offer serious solutions. i hope we will do that. >> thank you. >> i want to begin by commending you on your extraordinary leadership of this committee during my service on it. i have continuously been impressed by your patience and by your expertise. it has been a privilege to serve with you, sir, on the budget committee. and i am saddened that this will be your final one. the budget control act included a budget deeming resolution so that the budget committee can go forward with its annual spending bills.
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even though we already have a budget as a matter of law for next year, i agree with our chairman that this committee can be helpful in focusing attention on a longer-term, comprehensive deficit-reduction plan karen the budget control act cut nearly $1 trillion. but much more needs to be done. i commend the chairman on a much longer-term budget proposal. by the end of the year, these decisions will be forced upon us. if we begin meaningful bipartisan conversations now, we have the chance in this committee to play a significant role in those discussions. before considering any deficit- reduction plan, i want to remember that when president clinton left office in 2001, he left a balanced budget and a country poised to pay down by 2009 our entire national debt held by the public.
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those surpluses were squandered, largely through deficits funding tax cuts to the highest earning americans. any serious deficit reduction plan must include new revenue and i am pleased to see that the chairman's proposal, based on the president's bipartisan fiscal commission, would raise $2.40 trillion over four years through tax reform. the great majority of the american people and a majority of our colleagues here in the senate support a tax system that ensures that those at the very top of the income ladder pay at least the tax rate that middle-income families pay. no matter how elegant the reform we come up with, we ought to include this safeguard against future congresses inserting loopholes that benefit
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primarily well-connected high- income earners. while the chairman's version of the fiscal commission plan represents a fine starting point, i have deep concerns about the plan's cuts to medicare and medicaid. as members of this committee have heard me say repeatedly, we can substantially lower our health care spending and quality by improving the way in which we deliver health care. potential system-wide savings estimates have ranged from the $700 billion per year estimate of the president's council of economic advisers to the $1 trillion per year estimate of the former bush treasury secretary paul o'neill. the office of the fiscal commission plan testified before this committee last year and agreed with me on the potential for consistent reform. mr. bolles said that what you're saying is exactly right. but it is not this horrible -- but it is not exxonmobil -- it is not exhorable.
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if we are smart about this problem, we can avoid the tax and benefit cuts included in the plan before us today. this need not be a partisan issue. senator apartment has spoken to it with knowledge and conviction and i look forward to working with all my colleagues on both sides of the table to advance the substantial deficit reduction promised by wise health care system reform. i do reject the fiscal commission's social security recommendations. while other parts of the recommendations are more balanced, the social security proposal would restore long- term solvency 20%-20% combination of benefit cuts. as we know, the act prohibits -- this budget resolution does not do that. but since the mark follows the recommendations of the fiscal commission, i make this point, particularly with the change cpi.
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the current cpi failed to produce living adjustments in 2010 and 2011 could and i -- 2011. and i have heard from seniors out difficult it has become. the chain cpi makes it worse, not better. social security is fully solvent through 2036. we can prolong its solvency for the next 75 years by applying the payroll tax to income above two hundred $50,000. i supported bill that does this and i hope to include it in any deficit-reduction plan. mr. chairman, i think you once again for your dedication to this committee, for your integrity, and for your hard work on this budget proposal. i look forward to working with you to improve it and to passing a much-needed deficit-reduction plan.
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we could go through the regular routine of deficit neutral reserve funds vote back and forth and a climactic votorama on the senate floor. the alternative is that this committee could become the fulcrum of decision for the important choices our country faces. it may be holding out to much hope for this committee to take on that role. but you have placed your bets on that. and if you are right, it will be an historic decision. >> i think the senator. senator gramm is recognized for a statement. if you hold it down, it works better. maybe we just have a bad one. >> there we go. thank you. bipartisanship is breaking out
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already. first of all, we recognize that the chairman is not the problem. the chairman has tried to be the solution in different venues -- the gang of six, several members on the committee here, who tried to sit down in a bipartisan fashion to find a comprehensive solution on the revenues spending side. so clearly, your heart is in the right place. i am sure that was a tough political exercise. but institutionally, we are broken. that is how you get at 10%. i don't expect 100 senators to agree on a budget to get the nation out of debt. i expect about 65 of us to do that. the only way we will ever do that is to have a compromise. not only a compromise, but a base document to start working on. we have a statutory obligation so i reject the notion that this new process meets our statutory obligation. we are supposed to produce a
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budget. and people know what that means. i would really argue to the committee as a whole that the -- that, if the debt ceiling legislation is going to be seen as the budget, then why do we exist? it was done by a handful of people. i do not even know what they talked about. it would destroy this committee by the idea that that is an acceptable budget institutionalized in the senate. as republicans and democrats, we need to reject that notion, that what we did to raise the debt ceiling is an adequate substitute for what this committee is chartered to do under lock beard and i think it would destroy the value -- under law. and i think it would destroy the value of this committee to accept that. the 2010 election, it was about anything, it was about saving america from walking off a cliff that would down the nation, a democrat, republican, independent as a whole.
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most of the people in this committee the command of the 2010 election cycle felt like they had a mandate to do something different. that is why they wanted to be on this committee. the chairman has had that feeling for a very long time. we need to get ahead of this problem. i think this is a serious political miscalculation by our democratic leadership. you will not lose your job because you are trying to solve america's problems. you will lose your job if you just do the same old thing. i will vote for the ryan budget, even though i would like to change parts of it spent i honestly believe, mr. chairman, that the public in 2010 was trying to tell us you have gone too far. you let it get too out of control. and we are demanding something new. so here is what is so disappointing for me. this great election we just had, the voice of the people did not resonate very well up here.
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so we will have the new election. in 2012, here's what every republican on this committee will say, i hope. if you give us control of the senate, we will produce a budget statutory under the requirements of law. we will put our vision of how to balance the budget deal with revenue on the table. but we will produce a document because you have to do that at home. very few businesses are able to survive very long if they do not have a budget or a division for their business. no family can do what we're doing appear. i think we're missing a great opportunity. i think we're letting people down. and to my new colleagues to come on this committee, i know you will be very disappointed. thank you, mr. chairman. >> senator b -- >> here we are in the process of talking about a budget while appropriators are down the hall actually appropriating the money for the budget.
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they are already doing the work. for us to believe that, if we sit here for the next several weeks or months and debate a budget and then assume that the appropriators will then change all the actions they're doing, i think it is misleading. the second part is that the budget, which process is so unusual -- as a former mayor, the mirror proposes a budget and they have to -- the mayor has to propose a budget and they have to vote on it. to assume that we do all this work for a budget and the president signs it is mistaken. it is the appropriations that he agrees to. i know people have different views. we have heard it here about the budget control act. it is in place. and we had a chance to comment on it. we had a chance to debate it. and all of the senate members, we did that. some voted for it give some
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voted against it. the fact is that it passed. the president signed it. set some targets but the appropriators are now working through. that is where we are at. we can rehash all that. we can debate all that. i am not as new as the 10 folks, but i am the eighth person. i came here with a big group of people who wanted to see something done differently. so let's talk about what the
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long-term future is. that is what we can actually impact with the time that we have and the opportunity that we have in this process. when you look at this bipartisan agreement, which has been the does the commission plan, we can see peace as we like and pieces we don't like. but it is really a long-term blueprint. it will not be fun. we have to make some tough decisions, make some tough calls on what we will do. but if we are to be frank, if we're just to debate what we should be doing in the sense of a process, people are sick and tired of debating process. but they want to know is what we are going to do. i am interested in figuring out a long-term budget plan. that is what we have a chance to do. i can argue for should have a budget debate. the chairman knows my views. i'm not afraid of any amendment. bring it on. i have been through the votorama. it is a joke.
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it is a waste of time. at the end of the day, we looked at each other and pat ourselves on the back and said we did a great job and we walked out. the president did not have to hear that budget. that makes no sense. all of us who set the budget, we don't have that process. so why not have a process with a long-term plan. it is important to remember that we have already reduced the deficit through budget cuts over the last few years, significant progress, almost $2 trillion. 100% of deficit reduction and we have done some spending cuts. if you look at the economy, where we have been, i know some people think we can do a lot better. but we have come a long way in three years. we started to reduce its long- term problem.
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we have done some reduction. we have a stronger economy. as i mentioned, as a former mayor, you cannot solve this problem by just cutting your way out of it. there is no way. i don't care what commercials people will run in the future against me on this or what brochures people will write up or what one-liners will people say. this is a combination of things. by a cut-only approach, you will have an impact on local and state governments. that is law enforcement, teachers, people taking care of kids through daycare assistance, the juvenile justice system, our court systems, everything you can imagine. so i commend the chairman for taking a balanced approach, a non-partisan approach. i remember when the bolles-since then came out. we now have it in front of us.
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we do not need a super committee. this is the budget committee. this is what the budget committee does. so we have a chance to do this long term. before, when i came to the senate three years ago, i said that the strong health of this economy has three pieces to that. yes, have done that. as mayor, suffered multiple solutions -- i offered multiple solutions. we had a lot of good discussion, but we can do these things. it also means that we need to have certain components. you need to have revenue and smart investments for the long term, for this country and for our budget. the fiscal commission plan is very difficult in this direction. it carries a lot of credibility with me. you're looking at the architect of a plan that is very balanced. i respect the plan because it is
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♪ [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012]
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>> this is such a complicated conflict. we have never fought a war like this before. the second thing is what is referred to in washington as "nation-building." it is very targeted war
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fighting. >> david would spent decades covering military operations for various news organizations and won a pollock -- pulitzer prize for the -- won a pulitzer prize. find over 45 years of american politics and public affairs on your computer. >> when i was embedded in eastern afghanistan, the soldiers tried to tell me the u.s. garment was wasting tens of billions of dollars on mismanaged contracts. >> douglas wissing follows the money in afghanistan and fines corruption top to bottom. >> i met colonel mike howard. of death was not long after. obama took office.
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the said there were going to get a whole bunch of development money. carl howard said do not send any more money. send me contract officers beckon oversee this stuff. i need people, i do not need money. >> sunday night at 8:00 eastern on c-span's "q&a". >> in a few moments, a hearing on the management of the general services administration. washington journal is live at 7:00 eastern. our guest is the president of the national organization for women and the president of forbes, steve forbes. >> several live events to tell you about this morning. house majority leader eric cantor will be interviewed on c- span2 at 9:00 eastern.
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at 10:00 a.m. on c-span3, secretary of defense leon panetta and general martin dempsey talk about developments in syria. what this weekend on booktv, live coverage from the los angeles times festival of books. coverage starts at 2:00 p.m. eastern saturday and sunday. saturday, clarence darrow, dwight d. eisenhower, and jfk. at 7:30, call in with your questions are steven ross. sunday at 2:00 at eastern, watched our the take on liberals in "the cause of." the entire schedule for the weekend is online at booktv.org. >> a senate environment and
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public works hearing on the general services administration. members heard from brian miller and dan tangherlini. this is a little less than two hours. a mind reader, a clown, and a $75,000 bicycle building and training exercise. >> the meeting will come to order. meeting will come to order. thank you to the press. first before i start my statement, before i start, i want to the enter in the record a letter that i received from majority leader harry reid that makes clear that well run and cost effective conferences are productive and provide an important economic boost to our communities. i ask unanimous consent to enter
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his let near the record. do you have a similar letter from senator heller? >> yes, i do, i want his statement to be put in the record. >> absolutely. >> i'm going to ask that we each have seven minutes for our opening statement. the latest misconduct at the gsa makes me cringe. cringe for the taxpayers who expect every agency in their government to fulfill their mission with integrity and it makes me cringe for the good people at gsa who work so hard every day and have been humiliated by a few bad actors. to those who is betrayed the public trust, let me be clear. the party's over. it's over because of gsa inspector general brian miller. who was a bipartisan appointee of president george w. bush and president barack obama. and the party's over because of gsa deputy administrator susan brita, an obama appointee who blew the whistle and took this matter to the inspector general.
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and the party is over because the new acting administrative gsa, mr. daniel tangherlini is a no nonsense leader from the u.s. department of the treasury who aims to clean up this mess. this is not the first episode of misconduct at the gsa. the carter administration uncovered one in 197 and 1979 when a nationwide investigation noose long-standing corruption resulted in prosecutions for bribery, for fraud, and protections for whistleblowers in the agency. then there was more misconduct during the bush administration. the first occurred when the chief of staff to the gsa administrator traveled with jack abramoff to scotland even though mr. abramoff had business before the gsa. in 2011, this chief of staff went to prison. in 2006, the bush appointed gsa administrator steered a contract to a friend and. 2007, she organized a political call with 30 appointees to "help
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her friends win their elections." that violated the hatch act. the administrator repeatedly clashed with the inspector general, this inspector general in one report comparing his enforcement efforts to "terrorism." she resigned in 2008. and now here we go again in 2012. this time, involving what clearly looks like waste, fraud, abuse and possible criminal violations. the most recent example of misconduct involves a few individuals who saw the personal gain and exhibited scorn toward the public and exhibited scorn toward our president. there must be justice and restitution for this, and those who are responsible for in outrageous conduct and who violated the public trust must be held accountable. gsa administrator resigned and she should have. two of her aides were fired and they should have been. others are on administrative leave waiting further action. the acting administrator and the
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ig at gsa we are very pleased to have before us today are working closely together to ensure that anyone with more information comes forward, they have set up a hot line for that and they have sent out the word. checks and balances on the regional offices have got to be put in place and many have already. many conferences my understanding have been stopped or reduce fundamental scope, and gsa estimates that nearly a million dollars has been saved by the actions so far. regional financial officers must now report to the chief financial officer. awards programs have been shut down and reimbursements are being demanded from specific employees. the outrageous behavior of a few irresponsible unethical and perhaps law-breaking individuals are overshadowing gsa's achievements following president obama's cost saving directives focused on energy efficiency, reduced computing costs and disposal of unneeded federal
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property. gsa offers critical services to all federal agencies, but it is time to stop this series of failings that have occurred over four decades and over three administrations. it is time to send the clearest of signals that this type of conduct and this kind of betrayal of the public trust will not be tolerated. anyone in any agency who puts their own interests bob the country's interests will suffer the consequences. i really want to recognize the efforts to shine a light on the misconduct that took place at gsa. mr. miller, mr. tag her lee knee, thank you for taking deputy administrator susan brita's concerns seriously and following through on your public trust. this committee will support you and encourage to you clean house at the gsa. and before i yield to my friend and colleague, let me put into the record ar addendum that the inspector general brian miller gave us both sides of the aisle
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today, but he didn't have the time to get it into his had testimony. it goes through the various steps that he believes should be taken at the gsa. the first one is centralizing the program and budget management, the second is centralizing agency information management, the third is what he calls getting back to basics. gsa feeds to refocus on its core mission procurement and building operations. he said he found that many agency contracting personnel didn't understand fiscal law or the federal travel regulations or were unaware of the existence of agency policies that directly govern their daily work. this is unacceptable, he writes, and i would agree. then he said get out of the matrix as the former gsa administrator testified, gsa employee supervision is not presently linear. it is a matrix because many high level personnel report to two
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supervisors, each supervisor can deflect supervisory responsibility onto the other or claim to. and he says the matrix is really a sieve. and then he talks about requiring procurement accountability. and he goes into the fact that the agency needs to make sure that everything that is done has accountability attached to it. and i would just want to thank the ig for this. . it just shows what i think is so important about this hearing when senator inhofe asked me to hold it, what what i was concerned about that we would only do a lookback. we need to do a lookbook and have justice served but we need to look forward. so i'm very happy we have this opportunity to have you here so that we can talk about a is, how we hold people accountable and get to the bottom of the mess over there, but b, how we move forward to make sure that we
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don't have a repeat of this nightmare that has now occurred over so many decades and so many administrations. and i want to thank the two of you very much for being here today. and is susan here, susan brita? could you stand? i just wanted to say, i'm personally going to ask you to stand. i want to thank you so much that you had the courage to step out in what was a very difficult situation. thank you. senator inhofe. >> well, thank you, madame chairman. you had mentioned a comment made by senator reid and let me elaborate a little bit more on that. i was surprised when i say the fact that it was held in las vegas would have something to do with it. we're dealing with corrupt people here, madame chairman and what happened in las vegas would just as likely happen if it had been held in chicago or new york or anyplace else. so i think it's totally unfair for people to somehow draw a line there. i do thank you for holding the
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hearing. i've had a long history with this committee before i came to the senate in '94. i spent eight years on the committee over in the house and it happened that we were a minority but i was the ranking member on the gsa subcommittee and when you look at the overwhelming stuff they deal with, it is, if there's anyone who has a propensity to do something dishonest, that's where they ought to be. they deal with huge numbers and i've always been concerned about that and the long history of this happening. but the -- i think this serious waste and abuse of the taxpayers' money as well as possible fraud and i understand the office of the inspector general and i applaud the work that brian miller has done on this. it hasn't been easy. i know it's taken an awful lot of time and after the release of the ig report on april 3rd, i sent a letter to the chairman boxer requesting the committee hold a hearing, look at the ig's
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findings and also requested that both ig brian hill miller testify along with the acting administrator. so the i want to thank you madame chairman for doing that. in a way, if there's any media here looking for what they saw yesterday, it ain't going to happen here. we got the two the good guys here. >> right. >> we're not going to be accusing anybody. we just want to find out where we can go from here. i think it was articulated well by the chairman. of course, mr. tangherlini, you're kind of in a position where you're going to have to do some pretty uncomfortable things, but i know a little bit about you and i think they've got the right guy doing them. the report describes a number of disturbing findings from the investigation, some of the highlights were the gsa spending on the conference planning was excess i be, wasteful and in some cases impermissible. travel expenses for the conference total ling over $100,000, just not believable. catering costs $30,000. the gsa failed to follow
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contracting regular laces in.of the procurement associated with the wrc. and wasted taxpayers' dollars. the gsa encouraged excessive and expenses for food, $146,000 on catered food. $5,600 on semi private catered innen-room parties. it goes on and on. i think that i do want to have the whole statement. this has already been aired throughout the media. it's kind of interesting this morning, madame chairman, i was on the 7:00 cnn. it was supposed to be on this subject. and we went through about a 12-minute interview. they never even mentioned this. so i think people are getting a little tired of it already. nonetheless, it's real, it's a problem. we're going to have to deal with it. since the release of the report, the gsa administrator martha jackson has resigned and head of the public building service and the administrator's top adviser
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were fired. further, there are ten career employees have been placed on administrative leave. these dismissals highlight the seriousness of the findings of the report. i want to thank our counterparts in the house for their own responsible oversight and again, thank the chair for getting our own oversight. on the oversight, somebody was asking this morning on a thing that some radio show or something, why are you doing this? it's our constitutional duty. we have oversight responsibility and there's a reason that both the house and the senate do because the house and the senate are aump coming from different polls and it's something that we have to do. there's just not a choice. i say beginning because i believe that this goes beyond our one-time event. i'm concerned that this type of waste has become an embedded part of the culture of the gsa. the conference occurred during a recession and after the president's executive order for and "efficient, effective and accountable government" and
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calls for the elimination of waste. one can only wonder what kind of wasteful spending would have occurred in a better economy. as a committee with oversight responsibilities over the gsa, i hope we can find out how this happened and examine the safeguards the gsa has put in place to prevent this from happening again it would be prudent to the continue oversight hearings in the future to ensure this culture of wasteful spending has come to an end. we have an opportunity to restore the public's trust. and this goes beyond this. i can remember when we were a majority. the republicans were a majority and i happened to be the carom of the subcommittee on nuclear. they had not had an oversight hearing in 12 years. and they actually welcomed it. i don't think that any bureaucracy should go without oversight hearings. i'm going to recommend that we expant the number. i have not made a request for them but i think this will perhaps put us in a position where we will do that.
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i thank the chair for holding the hearing and look forward to hearing from our excellent witnesses. >> thank you very much. senator cardin followed by senator johanns. followed by senator baucus. >> thank you very much for holding this hearing. i thank the ranking member. this is very important. we all were shocked by the inspector general's report revealing the shocking and shameful extravagant spending that the gsa western regional service division engaged in in 2010. i think it's important to understand that this event is indicative of a culture of this agency that goes back many years. the inspector general miller and the deputy administrator that brought this problem to his attention should be commended for investigating this event, bringing this problem into the public eye, and calling for reforms within the agency. what's most important now is that congress work with the agency to advance smart and thoughtful reforms.
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the fact is, gsa is vitally important to the function of the federal government. gsa makes sure that federal government pays its rent on time, keeps the lights on in public buildings, manages federal priorities makes sure federal workers like the scientists as the fda and social workers at va working hard for the public good have the tools and resources they need to get the job done. that said, i often do not agree with gsa's approach to its business. in april of last year, i held a gsa oversight hearing, the first oversight this hearing this committee had had in years to examine gsa's management and service of federal courthouses. i've been in meetings with gsa public officials to discuss prospectus locations for federal facilities where gsa unabashedly refers to the agency in which they are seek space for as the client. and they view themselves as the broker. much the way a private rate firm
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hired to find office space for a private sector company would. this private sector is perception pervades this public sector agency and i think it may have had its roots in gsa's problems. many colleagues often call for the government to run more like a business. gsa takes pride in the incorporation of private sector sensibilities and practices into its work. and there are some cues government can take from the private sector in its operations. and management that are valuable. i would argue that gsa is part because of its function as a real estate and fleet manager and contracting agent is so similar to businesses in the private sector has led to the total blurring of the line between what actions are appropriate for a public sector agency to engage in. in reforms that return prokttive and accountability to gsa are in order. gsa's clients are the american people, not the social security
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administration or the fda or the national science foundation. and the american people are not shareholders, they're taxpayers. the extent of the wastefulness of taxpayers' dollars on the western regional conference is shocking. perhaps it's reflective of an agency tied so closely to the real estate and property management industry having hired many business professionals along with their business practices from the private sector that the agency thinks it's perfectly acceptable to hold a convention similar to those in the private sector. susie kim, an economist policy reporter for "the washington post" published an interesting commentary piece for the post on april 14th, and i'm chairman, i'll submit the entire article for the record but let me just quote one sentence from her article. "the real aim of contracting services is ultimately neither to make money nor to spend it. but to achieve a greater good."
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i hope this hearinging will advance that greater good for our nation and for our taxpayers. >> thank you, senator. senator johanns. >> madame chair, thank you 1re67. let me thank the ranking member and the chair for holding this hearing and i appreciate the attendance of the witnesses today. i'm going to be very, very brief. i'm looking at the clock and i have an ag members meeting in about a half hour so i'm hoping to be here long enough to hear your testimony and if i have questions following that, i'll probably submit those questions in written form for the record, but let me offer just a couple of thoughts. first of all, to the people are -- who have been involved if bringing this to light, we thank you for that. i have to imagine if this happened at this conference, there's other issues out there.
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i can't imagine that this was just an isolated incident. my experience with federal employees is the vast, vast majority of federal employees are there working hard. they want to do the right thing. they want to follow the rules. they don't want to get themselves into the kind of problems we see today. that's the vast majority of federal employees. but unfortunately, circumstances like this can really cast things in a very, very poor light. and i might add appropriately so the. these expenses and what you see here in the record is really amazing. i mean really astounding. my interest is going to be today and going forward the question of, what are you putting in place to change the structure and the culture of how gsa operates.
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often times, gsa is the piece of the federal government that interfaces with the public. they're out there working to negotiate contracts and that sort of thing doing the work that they're empowered to do. so it's just critically important that whatever happens from here forward, we have something put in place that puts this agency on the right path. gives them the right direction, sets the right course, changes the culture so some senate member is not back here five or ten or 15 or 20 years going through the same things again. so i'm so anxious today to hear from the witnesses. i have not had time to study the addendum, but i appreciate the fact that you're putting out ideas on how we can deal with this in the future. and my hope is that following this hearing, there might even be an opportunity to do some
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individual visits with senators to say this is what we're thinking about, this is the direction we think this agency needs to go forward. with that, again, madame chair, thanks for having the hearing. >> thank you so much, senator. senator baucus followed by senator barrasso. >> thank you, madame chair woman. thomas jefferson once said when a man assumes a public trust, he should consider himself public property. what galls me about this is this waste, this extravagance in contrast with a lot of people i met in my state during this last recess who are struggling to make ends meet. for example, in eastern montana, there's something called a bachen formation. it's heavily impacted by oil and gas development. the police force is stretched so
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thin they can't begin to deal with all the issues. and police officers start a $40,000 -- their salary is $40,000 a year and they see $800,000 spent, what's going on here. there's a little town of culbertson i visited. they're scratching to try to get money for a sewage system, trying to piece it together here and there. when they see this waste, they go what? we could use that $800,000 for a sewage system in our little town. otherwise, we can't afford it, we can't finance it. ingmar, montana is a very small -- populationing about two hands. trying to save their post office. the rent is $700 perrant who for that post office and they see $130,000 for eight preconference trips to las vegas. you know, it's just galling. it's absolutely galling when you see what the dollars could otherwise be spent for just for
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legitimate purposes. where people are really struggling. and i just tell you that i think senator cardin touched on it, nor johanns, there's something rotten in denmark. something's not quite right here. it's not just this. there's got to be a lot more. and i very much credit you, mr. tangherlini for taking over here. i have a lot of trust in you. i think you're the kind of guy who is going to straighten all this out but it's going to take a lot of work, a lot of work. it can't be something we can just deal with not only not -- just got to do the it moderately, can't do that, you've got to go to the core and get the culture problem rooted out at gsa. i just thank you, so much, madame chair for this hearing. i urge and demand of you almost as a person working for 1 million people that this is what they want. this is what my employer's want.
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i work for all those folks i talked about. you work for all those folks i talked about. everybody at gsa does. that's the public trust that we have to honor. >> thank you very much, senator. and now we're going to turnton senator barrasso. >> thank you very much, madame carom and senator inhofe for holding this hearing. i want to thank the inspector general and special agents involved in the investigation. i agree with what senator baucus has said and senator johanns. this investigation, it has exposed the waste, fraud and abuse at that time american people really resent so much. this hearing isn't about where this wasteful conference took place. it's really about arrogance and abuse of power. you look at the mission of the gsa's public building service to provide superior value it says, superior value to the american taxpayer. the gsa western region conference was a blatant disregard for the hard working
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taxpayer of this country. there was a systemic failure to follow the law and abide by the procedures to spend taxpayer dollars appropriately. these events did not occur as a result of a lack of controls. thee actions occurred because of a culture, a culture of excess within the gsa and a lack of respect for the rules and the regulations and the needs of the taxpayers of this country, a country with 15 trillion dollars in debt. i mean, you run through the list of $6300 for coins in very vet boxes, $9,000 conference yearbook, $58,000 audio visual services and 136,000 preconference scouting trips. plus a clown, a mind reader. the gsa employees involved in this incident have broken whatever small amount of trust that the american people may still have had with this government. and it is not just the excesses that has angered so many. it's also the way in which gsa has conducted business. it's deceived -- it's used
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deceptive tactics to hide the true costs of the conferences. you found the inspector general's found they provided contracts to vendors that undercut competition by disclosing other bids, violate the contracting rules by awarding so source contracts to vendor. the contracts in some cases violated set asides for small business. you can go on and on and on. administrators resigned, two senior gsa officials have been fired. ten individuals have been put on administrative leave. but that's not enough. the taxpayers demand more. a few ceremonial terminations and shuffling employees into new positions or departments are not enough. i understand jeff neely at the center of this intelligence is on administrative leave and is still getting paid. plrl neely and those who planned the conference knowingly defrauded the american people so they could throw a party on someone else's credit card. this is unacceptable.
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we demand that those individuals we must demand that those individuals be held accountable for their actions. this i believe is just the tip of the bice berg and i hope the committee conducts additional oversight hearings on the excessive gsa spending. madame carom, thank you so very much for holding the hearing and i look more to hearing from them in the future. >> senator boozman. >> in the interests of time, i'd just like to associate myself with the remarks of my colleagues. i appreciate your leadership and senator inhofe's leadership. we have our differences in the committee, but i think this is something that we're all united on and going forward and finding out exactly what's happened and you know, punish those that were involved and then also put in the safeguards so importantly so they'll this won't happen in the future. with that, i yield back. >> thank you so much. both senator inhofe and i appreciate that. now we're going to turn to the inspector general, first.
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is that all right? with you, mr. tangherlini? >> he all right. >> good morning, chairman boxer, ranking member inhofe, members of the committee. good morning, thank you for the opportunity to be here today. while my report details what went wrong at gsa in connection with the person region's conference, i would like to take a moment to focus on what went right. impt the system worked, the excesses of the conference were reported by my office. were reported to my office by a high-hanking political appointee and our investigation ensued. no one prevented us from conducting that investigation or obstructed what turned out to be a lengthy investigation. as each layer of evidence was peeled back, we discovered that there was more to look into and so our investigation continued. while some have suggested that the investigation took too long to produce the final report,
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anyone familiar with law enforcement investigations understands that when you turn over one stone, you often find more stones that need to be turned over, as well. and most people understand the need to be careful and certain before making public allegations such as those contained in the report. because careers and reputations are on the line. and my office does not take that lightly. moreover, the gsa administrator ultimately had control over the date on which this report was released. because it was the administrator's response to the final report that triggered its public release. the system also worked in that people responsible for the conduct detailed in my report are being held accountable. it is my understanding that after the white house received the final report, the administration took swift
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action. a new acting administrator was appointed. senior officials were fired, and one resigned. finally, the system has been strengthened by the release of the report. the public attention it received in the media and from both houses of congress and the strong commitment to our efforts demonstrated by the acting administrator dan tangherlini while not one of many career employees and political appointees who were involved in the western region's conference ever came forward and reported the waste and abuse that occurred, perhaps for fear of reprisal, gsa's honest, hard-working employees now have been empowered to bring issues to our attention and they are doing so. we have more work than ever. i look forward to answering all of your questions. thank you. >> thank you so much, mr. miller. mr. tangherlini.
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>> good morning, chairman boxer, ranking member inhofe, members of the committee. my name is tangherlini, the acting administrator of the u.s. general services administration. i appreciate the opportunity to come before the committee today. first and foremost, i want to state that the waste and abuse outlined in the inspector general's report is an outrage and completely antithetical to the goals of the administration. the report details violations of travel rules, acquisition rules, and good conduct. just as importantly, those responsible violated rules of common sense, the spirit of public service, and the trust america's taxpayers have placed in us. i speak for the overwhelming majority of gsa saf when i say that we are shocked, appalled and deeply disappointed by these indefensible actions as you are. we've taken strong action against those officials who are responsible and will continue to do so where appropriate. i intend to uphold the highest ethical standards at this agency
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including referring any criminal activity to the appropriate law enforcement officials and taking any action that is necessary and appropriate if we find irregularities. i also immediately engage gsa's inspector general as indicated in the joint letter that the inspector general brian miller and i sent to all staff, we expect an people who sees waste, fraud or an beautibuse to repor. we can't to build an partnership with the ig while insuring their flpd to ensure nothing like this will happen again. there will be no tolerance for employees who violate or disregard these rules. i believe this is critical not only because we owe it to the american taxpayers but also because we owe it to the many gsa employees who work hard, follow the rules, and deserve to be proud of the agency for which they work. we will have also taken steps to improve internal controls and oversight to ensure this never happens again. already, i have canceled all western regions conferences.
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i've also canceled 35 previously planned conferences saving nearly a million dollars in taxpayers expense. i've suspended the hats off stores and demanded reimbursement from mr. peck, mr. robert shepherd and mr. neely for private inroom parties. i've canceled most travel through the end of the fiscal year agency wide and centralizing budget authority and vin already trawlized procurement oversight for regional offices to make them more directly accountable. i look forwarded to working in partnership with this committee to ensure there's full accountability for these activities so that we can beginton restore the trust of the american people. i hope that in so doing, gsa can refocus on its core mission saving taxpayers money by efficiently procuring supplies, services and real estate and effectively disposing of unneeded government property. we believe that there is seldom been a time of greater need for these services and the savings they bring to the government and the taxpayer. there is a powerful value
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proposition to a single agency dedicate odd this work, especially in these austere fiscal times. we need to insure we get back to the basics, conduct this work better than ever. at gsa, our commitment is our service, our duty and our nation, not to conferences, awards or parties. the unacceptable inappropriate and possibly illegal activities at the western regions conference stand in direct contradiction to the express goals of this agency and the administration. and i'm committed to ensuring that we take whatever steps are necessary to hold responsible parties accountable and to make sure that this never happens again. we need to refocus this agency and get back to the basics, streamlining the administrative work of the federal government to save taxpayers money. i look forwarded to working with committee, moving forward and i welcome the opportunity to take any questions at this time. thank you. >> thank you both very much. as senator inhofe said, you are the good guys in all of this,
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and susan is a good gal. susan brita who came forward as a political appointee to blow the whistle and it resulted in the president's administrator resigning as she should have and two people being fired. again, i say to miss brita thank you for your courage. this is not easy. i've done a lot of work on whistleblower protection and i know, you got to move the clock here, and i note how hard it is. and the scorn that is oftentimes heaped on those who have the currently to step forward. and you did it for your country. and we appreciate it at this committee. you know, as i researched this and i realized how many scandals there have been involving gsa, it really shakes you up. because when you look back in the president carter thought he cleaned up the mess way back in the '70s. and they put people in jail for bribery and fraud. and they put in whistleblower
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protection and all of that, so now you move forward, then you see two scandals under george bush and now this horrible scandal under president obama. so this is decades long. so i guess the question i have for you, and i don't expect you to have a pinpointed answer, but what is it about the structure of the gsa that leads us to back to these scandals after this -- in other words, the expression sgs fool me once, you know, okay. but again and again? four scandals? three administrations, so is it, do you think, as i read your recommendations, i say the inspector general and i ask mr. tangherlini as well, is it the fact that there hasn't been a centralized check and balance so that you've got these regional offices gone wild here if they have the wrong leadership? and is that what we need to fix? how many regional offices, regions do we have in gsa,
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mr. miller, and are you enforcing a more of a centralized at this point checks and balance system right away for all of the regions or have you just gone after the western region? >> madame chair, there are ten regions of gsa, plus the district of columbia. so essentially 11 regions. the western conveniently made up of seven, eight, nine, and ten. and it's an informal -- they informally call themselves the western region and they have this conference. there is no eastern region, northern region, southern region. they don't as far as i know have these conferences. as you identified -- >> i don't want to just dwell on the conferences because if there's people who are cheaters and people who were bad actors they're going to figure out another way to steal. >> right. >> forget the conferences. so my point is, you're telling
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me there's ten regions plus d.c. i understand there's 12,000 employees. is that correct? >> over 12,000. and i guess willy sutton was asked what, do you rob banks? he said that's where the money is. part of the reason there's a lot of crime and fraud, waste and abuse at gsa is a lot of money flows through gsa. you know, it handles money on behalf of other agencies. it has millions of dollars flowing through it. and it has over 12,000 employees. in any town that you have in the united states of 12,000 or more, you always have a jail. so that you will always have people doing criminal things and dumb things and silly things. and it's no different, unfortunately, in the federal workforce, have you people doing criminal things and dumb things and that's why you need
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inspectors general to monitor for fraud, waste and abuse. >> i agree. what i'm trying to say is have you looked at this notion, have you looked at this notion of more centralization and checks and balances. have you done that for every region or have you just now done this for the western areas because of this problem? i mean, obviously, a lot of us i think this is a systemic problem. so i'm asking you if these reforms are going to go forward. are you recommending to mr. tanker lee me that he have centralized most of the operation? >>. >> well, as you can tell from my supplemental statement, that is the direction we think gsa should go, but how gs app is managed is essentially an agency function and is at the discretion of the administrator. it's a little out of my lane. >> i'm going to ask. so given the recommendations of the inspector general that there be more chicago and balances and more centralization, what's your take on it at this point,
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mr. tangherlini. >> i already with only a couple of weeks of experience with the organization already have strong indication that we need to centralize certain functions. late last week is, i took steps administrative steps to centralize the finance function so that our chief financial officer of the general services administration actually served in that will capacity straight out to the regions is, as well. from what i understood, the regions had some autonomous ability to once their budgets were allocated spend within those allocations. so one of our initial moves is to make sure that that chief financial officer actually has visibility straight down into the expenditures at the regional level. there's a lot of work we have to do to bid the systems necessary to have visibility into the regional expenditures. we've also taken steps to consolidate the procurement oversight function, as well. and what we think we can doing
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is continue to have some level autonomy so that there's innovation and that the regions can reflect the needs of the local area. but we need to have clear accountability. >> uh-huh. >> now, we're going to look at the entire structure of the agency top to bottom. we're going to undertake a process we're already involved in that to look at the way the system is you can have toured so we can ask ourselves the kind of clean sheet of paper type questions how should it be structured. >> i want to say this and i'll hold for my next round but you know, senator inhofe alluded to this as did others. we're going to need to have more oversight. so how many months do you think it will take you before you're ready to put these new systems in place because we would like to have you back to give us a progress report. >> well, i think we've already started making changes. so that's part of what i'm here to report on today. we have the good fortune of having the budget process, the 2014 budget development process.
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we're entering into that now. so i think we're going to use our 2014 budget development process which col minnates to recommendations to omb in september and a budget in february. we're going to use that process to start delving into this but that doesn't mean we're going to wait till the outcome of that process to make necessary changes. >> good. let me just say i will discuss this further with my ranking member whom i respect so much and i think around september, perhaps late september, we ought to have you come in to talk about this because we got to stay on this. you in one sense you're fortunate because you're coming in on the heels of this and everyone's going to give you the latitude. and you know, don't listen to those voices who say we can't change. senator inhofe. >> thank you, madame chairman. senator johanns has an ag commitment he needs to get to and i don't so i'd like to have you go ahead of me in line here. >> thank you very much. that's very kind of you.
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i appreciate the courtesy. plif miller, l plif -- mr. miller, let me start with you. i have to assume that will with everything that has happened that has transpired that you are also looking at other areas within the gp subpoena app. as you have gone through you this in your thinking about what happened and going forward, what thoughts would you have, what recommendations would you have you in terms of how the gsa just better manages what's happening? because this is beyond normally what an inspector general would run into. i think everybody would agree on that. how do we stop this? how do we put the right structures in place to empower the leadership at gsa to make sure we're not back here again?
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>> thank you for the question. we have to deter others from committing criminal acts from committing fraud, waste and abuse. we had a region and a regional commissioner that was doing all sorts of things that are documented in our report. and we produced to senate committees and house committees. but the ultimate deterrent is criminal prosecution. and we are doing all that we can to identify those committing fraud and crimes and referring them to the department of justice for prosecution. we are doing all that we can to hold them accountable for civil liability not just in terms of employee misconduct but people who do business with the gsa. oracle paid $199 million back recently because of the work of
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our auditors. and so we are doing our best to hold people accountability. en i know mr. tangherlini has some ideas about changes. you've heard my general recommendation ta we need to have a strong system where people are held accountable. regional people need to be held accountable and people need to manage. you can't legislate good management and good judgment. but you can try and put into place some systems where people do manage. and i'll let mr. tangherlini speak more about that. >> go ahead, offer your thoughts. >> thank you very much, senator. i think the inspector general described it very well. i think we need to look at the way we've structured the organization, look at their reporting lines of authority, and ask ourselves, is this structure that will ensure clear accountability. again, autonomy allows for the opportunity for a certain amount
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of innovation. the point though is that that innovation has to happen within the constraints of accountability so we know what's taking place. we have a shared view of what's taking place, that there are appropriate checks and balances so that nothing like this can happen again. >> let me ask both of you, mr. miller, something you said triggered this thought. is this based upon what you've seen so far, is this a regional issue, or is this a systemwide gsa issue that you're facing? or is this just simple mr. i a situation where the regional leadership was so lax, so whatever, that this just spun totally out of control? what's your thoughts on that? >> well, i'm a former prosecutor. i tend to see misconduct in a lot of places. i would say yes to all of the above. obviously, there is misconduct
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on the part of regional officials. but there was a national central office official, the commissioner of pbs that threw a party in his loft suite and charged the taxpayers 1,000 -- over $1,9h00 for food. that's a senior office high ranking senior official. so i think that there is a problem throughout. but you know, as an ig, we do reports based on specifics. we've done a report specifically on the western region's conference. i'm reluctant to make generalizations but i do throw those particular facts out to you about the party and you can draw your own general conclusions. >> okay. >> i think the events in the western region conference speak for themselves, that clearly a
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leadership ip issue happening particular out out there in region nine at the time that the this conference was planned and certainly undertaken. i haven't been there long enough to really get a sense organizationally whether this is a broader cultural problem or not. that's why we want to look top to bottom at the organization and ask ourselves the clean sheet of paper type questions. are we structured in such a way, have we built ourselves a culture in such a way that it encourages this kind of activity although i don't think there's any evidence beyond what we've seen in region nine and what happened with this particular leader in this is endemic but we're open to that possibility and work very closely with the ig. i think equally important, frankly, is making sure we build a system with him appropriate accountability, appropriate checks and balances, appropriate visibility into the actions that people will have opportunities to stop this kind of thing before it happens. >> i don't want to abuse my privilege here by extending this because i'm out of time.
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but i do want to just offer a thought. it would seem to me that an auditing process of some kind either wasn't working if it was in place or in the alternative, if it's not in place, it needs to be. you would think just a regular auditing process would have picked out these issues and said whoa, wait a second. time-out here. you're heading off in a wrong direction. for whatever reason, that didn't seem to happen here, which i find very, very surprising. so maybe a fix going forward is to fix whatever is there that wasn't working or in the alternative, put in place an auditing process to catch these things. so thanks. >> do you want to go ahead? >> okay. mr. . .
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trying to put this into perspective, the event took place in october 2010. this interim report came in may 2011, i understand. and so then you had another 11 months. if you had been in the position of miss johnson at that time, the position you're acting in right now, what would you have -- what would you have done when that interim report came out? how would you have handled that? >> it's very hard to conceive of the response to such a hypothetical. however, it's also easy to use 20/20 hindsight. i think the -- i think going forward, the best thing to do is build the kind of relationship that i tried to start on day one with our inspector general. my first day off -- into the office, i came in, met with brian and his team. we subsequently had a one on one in which i sat with his entire leadership team and worked with them to try to understand what
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are the big challenges. i would like to build the kind of relationship where we have continued and direct communication and, as a result of that communication, we have swift and immediate action on the part of the administration. >> it's my understanding that -- maybe you can clarify this, mr. miller. it was after the interim, that may of 2011, that mr. neely actually went on several trips after that report came out. i'm talking about two trips to hawaii, saigon, trip to guam, napa valley and several other places. is that correct? >> that is correct, unfortunately. >> that is -- all right. mr. tangherlini, the -- you talk about a total, i guess, of 11 regions, if you count washington. and this was seven, eight, nine -- or eight, nine, ten and 11, i guess.
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are you aware of in the other areas, any other ongoing investigations that you would feel comfortable talking about? do you know of any others that are taking place, other regions other than this? is this an isolated case for right now? >> so let me just, if you don't mind, reiterate it's seven, eight, nine, ten. region 11 is the national capital region. >> i see. that's fine. >> but as far as ongoing investigations, i think it's actually better if the inspector general speaks to that. >> okay. that's fine. >> senator, yes, there are ongoing investigations. some involving other regions. >> okay. and were they stimulated because of this problem coming up? or were they already under investigation? >> some were stimulated because of this. i would have to check on exactly how many. as i said in my opening statement, the result of this -- the release of this report is that people are coming forward
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now. they are calling the hotline. and as a result of administrator tangherlini and my joint appearance before gsa, encouraging people to come forward to my office, people are coming forward and reporting things. >> okay. i understand you had a letter that went to -- you, mr. tangherlini, that went to the oneely, shepherd and i guess peck was the other one, requesting return of funds that should not have been spent. is that correct? and are they complying with that? >> it was acting public buildings commissioner linda charo who sent the letter to those three individuals demanding return of funds associated with those events. we've also begun the process, using the inspector general's report to go down the list of other places where we believe the federal government and the federal taxpayers inappropriately paid for ineligible items. >> let me
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